2010 LEGISLATIVE AGENDA

Return Policies for Retail Establishments

Retail Council position

Oppose legislation that would limit any merchant’s right to craft and enforce its own policies relative to the returning and/or exchanging of merchandise, including the use of electronic methods to track returns by consumers.

Legislative action

The Retail Council worked constructively with the Legislature and the New York State Consumer Protection Board on Chapter 278, Laws of 2009, which requires retail establishments to add to the list of mandatory disclosures the dollar amount of any fees associated with merchandise returns, among other requirements. 

The Retail Council opposes A.3404 (Perry), which would require a store to disclose whether it uses electronic tracking of returns, prohibit certain restrictions against the return or exchange of merchandise, and allow for local laws to supersede. The bill remained in its committee of origin at the close of the 2009 Legislative Session.

At a glance

  • Return abuse by some consumers and organized retail criminals has become a multi-billion dollar enterprise, with the retail industry losing more than $16 billion annually because of fraudulent returns, according to the National Retail Federation.  This is atop the estimated $30 billion cost of organized retail theft, according to industry estimates.

  • Legitimate retailers would rather not impose strict return policies, but certain safeguards now are necessary to protect merchants against excessive losses and return fraud perpetrated against them.

  • Return fraud tactics include the use of stolen or “found” sales receipts, counterfeit sales receipts, counterfeit UPC symbols - all used to return stolen merchandise to the store from which it was originally stolen or from another store within the chain of stores.

  • Available tracking software allows a retailer to use objective measurements and standards to evaluate whether to accept a customer’s return. Software seeks certain identifiable patterns of excessive returns and is not designed to reject the returns made by legitimate customers who wish to return items that they do not want.  Retailers using tracking devices deny up to 90% fewer returns from their customers than do retailers who do not use such software.

  • Protecting consumers’ privacy, tracking software ensures that a customer’s return experience in one store is in no way available to other merchants.

  • Because return practices differ for each merchant, each must retain the right to craft return policies that best fits its own business model and its own experiences with its customers. No merchant wants to alienate its customers - but no merchant today can afford to allow fraudsters to perpetrate unabated this costly form of organized retail theft.

 
 
 
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